Banks vary in practice and disclosure of information related to fees and charges on low-balance and inactive accounts
If you are a small depositor with a low balance bank account. Or, if you have left your bank account inactive for a period of time. Then chances are not only will you earn no interest, you are liable to pay also a service charge to the bank.
To investigate this banking practice and related charges, the Consumer Council has conducted a survey covering both savings (HK$ and US$) and current (HK$) accounts of 38 retail banks in Hong Kong.
The findings are as revealing in the variations of the practice and related charges as they are useful in providing consumer guidance.
The survey clearly shows that the majority of banks (33 out of 38) would levy a service charge on inactive and low balance accounts. The norm for local currency accounts is to charge $50 half-yearly when the account is inactive for 24 months and its balance falls below $1,000.
But there are variations to the practice and level of charges. For example, 2 charged for inactive accounts only. 2 charged for inactive and also for low balance accounts. 3 others imposed low balance charges on accounts whose combined average monthly balances fall below the specified minimum.
In addition to levying service charges, 17 banks indicated that they would deduct or abolish any interest payment for low balance or inactive accounts. Banks adopting the practice are urged to state the rules clearly in the service charge schedules as only 2 of the banks in the survey disclosed such information to consumers.
The survey also found non-compliance of the Code of Banking Practice by some banks in the disclosure of information related to fees and charges. 10 banks were unable to provide service charge schedules upon request while 9 did not display the schedules in their branches.
Banks are strongly urged to strictly observe the information disclosure requirements on fees and charges to enable consumers to make comparison and to avoid unnecessary disputes.
The Consumer Council is particularly concerned with the underprivileged and the low-income who need to conduct transactions such as receipt of pension and payment of school tuition fees through bank accounts.
The Council therefore calls on the banking industry to give special consideration to waiving the low balance charges for these less fortunate people in the community.
Depositors, on the other hand, should streamline their holding of bank accounts in their own interest to avoid unnecessary service charges and, at the same time, save the banking resources on administration and auditing as well as security control.
- Table 1 : Low Balance/ Inactive Charges
- Table 2: Summary of Interest Deduction & Abolition
- Table 3: Information Disclosure
- CHOICE Guide: List of banks adopting practices more favourable to depositors
Survey uncovers over 80% of EAS users reluctant to wear portable trigger crucial for summon of timely rescue
How effective is the Emergency Alarm System (EAS) for the elderly, which has been in operation for just over two years?
A timely rescue through EAS could mean the difference between life and death to an elderly living alone.
The Consumer Council has completed a comprehensive assessment of the EAS, which consists of laboratory and on-site testing, users' experience survey and control centre audit.
The assessment report was published in the December (266) issue of the Council's monthly magazine CHOICE.
Foremost among the findings of the assessment is the concern over the failure of a very vast majority (83.1%) of the users to wear the portable trigger, an alarm button to summon rescue in a moment of emergency. Two users actually lost the device. This was revealed in home visits of about 200 EAS users of mostly elderly.
EASusers are strongly urged to wear the portable trigger at all times as emergency may strike any moment and it could be the only link they have to raise the alarm for rescue.
The users in the survey put up a host of reasons for their reluctance to wear the portable trigger:
- It gives a sense of bad luck.
- It's inconvenient especially in hot weather.
- It's uncomfortable when the cotton-made neckband is wet.
- The metal-made neckband may scratch or irritate the skin.
- Wearing the trigger is necessary only when they feel sick.
- They believe where they leave the portable trigger is conveniently and easily accessible when the need arises.
- They fear damage to the portable trigger through wetting by water or infiltration of smoke.
- They are afraid children may activate the alarm out of curiosity if they wear it.
The survey observes that the most common places where the users put their portable trigger are: beside a bed, on a desk or table, wall or the upper deck of a bed, beside the door. But some were observed to leave the device in less accessible places such as inside a cupboard, a drawer or a bottle.
The assessment also took into account the performance of the equipment used for the various systems and the design and reliability of these systems in operation.
It was found that some control centres have more reliable system design while some centres offer better preventive maintenance to enhance system reliability.
The survey found that the average response time by the control centres ranges from 26 seconds to 36 seconds.
The performance of some products also need improvement. For example, the design of the alarm button requires its user to hold it down for a while in order to activate the alarm.
Portable triggers of the same system may vary in performance. Some samples gave satisfactory range measurements while some had only a limited range even within a home. Consumers are advised to regularly check the performance of these portable triggers.
The test also evaluated the samples' ease of use, back-up battery performance, system failure indication, telephone override, two-way conversation, etc.
Those who need to take care of the elderly in the family or are engaged in elderly service are strongly urged to consult the assessment report, and to encourage EAS users under their care to wear the portable trigger as a precaution.
Traders should also take note of the users' experience and address the problems. The product suppliers and service providers are advised to improve the ergonomics of the portable triggers and the training of users.
The Consumer Council has sent the assessment report to the relevant authorities, and traders and operators concerned.
Council concerned over inaccuracy of nutritional labels of so-call "fortified" foods
The Consumer Council is concerned over the accuracy of nutritional labels on a growing range of so-called "fortified" foods with added vitamins and minerals.
This follows a European research and analysis of some 3,000 fortified foods has revealed that in over two-thirds of cases the listings for added vitamins and minerals were significantly inaccurate.
The test was undertaken by the International Consumer Research and Testing (IT) in collaboration with independent consumer bodies in 14 member states of the European Union.
It aims to assess the extent to which the claimed nutritional content of fortified foods is accurately labelled and presented to consumers. The results are unsatisfactory and disturbing:-
Of all the 3,077 fortified food samples, only 30% are considered acceptable in that their nutritional labels had a variation - the discrepancy between the test results and food labels ? of less than 20%.
- Over half (56%) or 1,734 of the samples deviated between 20% and 100%. Surprisingly, the vast majority of these discrepancies (43%) were in cases where the foods contained more - rather than less - of the added vitamins and minerals than listed. 13% contained less nutrients than claimed.
- But probably the most worrying finding was that in 12% of fortified samples the discrepancies were 100% over or under the declared amount of added vitamins and minerals.
The IT test has given rise to concern that not only that fortified food products contained less nutrients than labelled, which is unfair to consumers.
But equally undesirable is the practice of adding excessive amount of nutrients, especially fat-soluble vitamins such as vitamin A and D.
Excessive vitamin A intake may increase risk of spontaneous abortions and birth defects for pregnant women. Excessive vitamin D may lead to deposition of calcium in soft issues and irreversible renal and cardiovascular damage.
In the interest of consumers, the IT has put forth a set of recommendations to improve the standard of nutritional labelling of fortified foods which include:-
- Specify by legislation the maximum level of micronutrients (vitamins and minerals) fortification in each product group, which should not exceed 100% of the Recommended Daily Allowance (RDA) of the nutrient concerned.
- The quantities shown on labels should be accurate, not more than 20% or below 10% of the amount labelled.
In Hong Kong, the Consumer Council has conducted a survey of 213 samples from food groups where fortified products are common: cereals, milk products, orange juice, salt and candies.
Among these samples, 41 or 19% of them were marketed as fortified foods, indicating that fortified foods, probably with the exception of milk products, are not as popular in Hong Kong as in the European markets.
The survey by the Council on the local market indicates that most common among the added nutrients found locally are calcium followed by iron, vitamin C and D. Few products are fortified with vitamin A, iodine, magnesium or folic acid.
The same survey shows that the fortified foods from some brands were more expensive, by 25%,than their non-fortified versions though some are not priced any differently.
Consumers are strongly advised to maintaining a well-balanced healthy diet which can be available at affordable prices - based on a high consumption of cereals, fruit and vegetables and a moderate consumption of meat and diary products with a low intake of fats.
Consumers should bear in mind that an unhealthy food item cannot suddenly become otherwise imply because of a few added nutrients. A person with a balanced diet has no need to resort to fortified foods.
Use only cordless phones with OFTA approval label
Consumers are reminded to purchase only cordless telephones which bear an approval label designated by the Office of the Telecommunications Authority (OFTA).
Under the Telecommunication (Cordless Telecommunications Apparatus) (Exemption from Licensing) Order, possession and use of cordless phones meeting technical specifications of OFTA are exempt from the licensing requirement. It is an offence to possess, use or sell cordless telephones not complying with the Exemption Order - which may cause interference to authorized radio services.
Upon summary conviction, the person responsible is liable to a fine of $50,000 and imprisonment for 2 years. In the year 1997/98 (April-March), 18 people were convicted and fined a total of $128,000 for the illegal possession and use of cordless telephones.
Included in this December issue of CHOICE is a report on cordless telephones and the 5types which have been exempt from licensing under the Exemption Order of the Telecommunication Ordinance. They all should bear an OFTA identification label.
The report notes that the majority of approved cordless telephones available in Hong Kong retail outlets are analogue 46/49 MHz type, followed by digital DECT phones.
According to a recent report published by the UK Consumers' Association, some digital phones can cause interference to hearing aids. Therefore, hearing aid users should try out the cordless phones before buying.